Residence nil-rate band calculator

Everyone can leave up to £325,000 of their total estate free of inheritance tax (the nil-rate band), provided this allowance hasn’t been used when making gifts, for example, or settling assets into trust. Your client’s estate is the sum of their savings, investments, the market value of the house they live in and their other assets.

But there’s an additional inheritance tax allowance – the residence nil-rate band (RNRB) – which can be claimed by the estates of people who die after 6 April 2017. By filling in your answers below, our calculator will estimate the degree to which the RNRB may benefit your client – and therefore gives some indication of the inheritance tax due on your client’s estate.

Some things to keep in mind

Please note that inheritance tax is a complicated topic and this calculator is intended to help you understand some of the key areas. It has been prepared in good faith and is based on our understanding and interpretation of the current law. Keep in mind that client-specific circumstances that are outside of the scope of this calculator may result in different levels of inheritance tax being due and legislation may change in the future. A tax adviser will be able to take your client’s personal circumstances into account and give up to date advice based on the legislation in place at the time.

1

Assess your situation

2

Your marital status

3

Plan for the future

4

Year by year results

1

Assess your situation

How much is your house worth?

?

Other properties

?

Savings

?

Investments

?

Other

?

Based on the estimated figures you have entered, this gives an estate value of:

House value: £ 0

Value of other assets: £ 0

Total estate value: £ 0

As your estate is worth more than £2 million, the RNRB may be restricted or not available at all. We have assumed that your estate will not benefit from any additional RNRB, but recommend that you seek professional advice specific to your situation.

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2

Your marital status

What is your marital status? ?

Married/Civil partnership

Widowed

Unmarried/Divorced

Assets left to spouses are not normally subject to inheritance tax. It may be useful for you to provide information for the value of your joint estate if you would expect to inherit all of your spouse's assets.

Was the value of your spouse's estate more than £2 million when they died?

Yes

No

If your spouse's estate exceeded £2 million, your entitlement to an additional RNRB may be reduced, or even eliminated. We have assumed that your estate will not benefit from any additional RNRB from your spouse, but recommend that you seek professional advice as to your specific situation.

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3

Plan for the future

Did you sell your home before 8 July 2015?

Yes

No

Do you plan to downsize in the future?

Yes

No

Do you plan to leave your house to your direct descendants (children or
grandchildren) when you die?

Yes

No

Based on your selection, the residence nil-rate band is unlikely to benefit you. You’re welcome to continue using the calculator but we’d recommend you seek professional advice.

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4

Year by year results

Select one of the two buttons below to see how the residence nil-rate band might apply to your situation. The calculator assumes that you die in the tax year which is checked below.

The residence nil-rate band is £150,000 for the 2019-20 tax year. In April 2020 it will increase to £175,000. It will then increase every year in line with inflation, as measured by the Consumer Price Index.

Select one of the two buttons below to see how the residence nil-rate band might apply to your situation. The calculator assumes that you die in the tax year which is checked below.

The residence nil-rate band is £150,000 for the 2019-20 tax year. In April 2020 it will increase to £175,000. It will then increase every year in line with inflation, as measured by the Consumer Price Index.

2019/2020

2020 and beyond

The maximum nil-rate band (NRB) at the point selected above will be:

£325,000

The maximum residence nil rate band (RNRB) at the point selected above will be:

£0

Based on the information you have provided:

Your NRB at the point selected above will be: ?

£0

Your RNRB at the point selected above will be: ?

£0

Your results:

After deducting the available allowances, we estimate that your estate would potentially be subject to an inheritance tax bill of:

£0

This calculator can only provide an indication based on the information provided above. Tax planning is a complex area and tax treatment depends on personal circumstances, so we recommend investors seek professional adviser. Also, tax treatment may change in the future.

Before Starting

Inheritance tax can be a complicated topic and these tools are intended to help you understand some of the key areas. They have been prepared in good faith and are based on our understanding of the law and our interpretation of it. But we do not provide tax advice. So, while we have tried to make inheritance tax simple, this calculator is not intended as a proxy for taking professional advice - advice that will help you understand how much tax may be due on any gifts you make or on your estate.

We always recommend that, prior to undertaking any tax planning, you seek the advice of a qualified professional adviser. He or she can take your personal circumstances into account and give up to date advice based on the rules at the time.

The investments that we manage are high risk and the value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the portfolio companies maintaining their qualifying status. The shares of the smaller companies we invest in could fall or rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: November 2016

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Please read

We hope this calculator has been helpful for you and your clients. Remember, whatever inheritance tax liability we’ve calculated for your client’s estate, the value of their property and assets is likely to change over time. This means their estate could face a different inheritance tax liability in the future. If they want to know more, our guide to inheritance tax can help you walk them through their options.

Next step

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Our products and services are only available to UK residents.

All of our investments place capital at risk, and investors may get back less than they invest.

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